The first six months of 2014 logged 165 announced merger and acquisition transactions of insurance agencies in the U.S. and Canada, according to a new survey from OPTIS Partners, an investment banking and financial consulting firm specializing in the insurance industry.

That’s a jump of nearly 40% from the same period in 2013 and marks the most active first half since the firm began tracking transactions in 2008. It’s also the second most active six-month period OPTIS has ever recorded—a significant feat considering many sellers wait until year-end to act, opting for a little extra time to pay their taxes.

“Historically, Q4 has always been the most active quarter,” explains Tim Cunningham, managing director of OPTIS. “But now we’re entering a very active merger and acquisition phase with the convergence of a very active buy group that’s well-capitalized and has a fairly deep inventory.”

That “deep inventory” is full of baby boomers who are rapidly aging out of the insurance industry—which is why Cunningham says the key factor in gunning for a merger or acquisition this year has little to do with objective reasoning or business-related concerns, even amid an improving economy and forecasts of a softening market.

“If sellers were totally motivated by fact-based stuff, logic would have dictated that those who sold in 2013 and into this year should have sold a year and a half ago to save five points of tax,” he says. “Maybe someone might have thought the economy’s improved and now’s the time to get out, but I think by that logic one would think, ‘It’s improving every quarter—I should wait another two years.’”

Instead, Cunningham believes the decision to sell springs from lifestyle changes among the boomer generation. “What I tend to see happen is the sellers have what I refer to as an epiphany event,” he explains. “Maybe someone has a health scare in the family or amongst friends, or someone’s living in the northern climate this past winter and says, ‘Wait—I’ve got my place in Arizona or Florida and it’s zero degrees again with another foot of snow. Am I nuts?’”

Boomers that have this kind of ‘epiphany event’ and haven’t secured a solid perpetuation strategy often have no choice but to sell. In fact, the scorching pace of mergers and acquisitions in 2014 to date reveals startling perpetuation gaps for independent agents and brokers.

“The industry has been woefully unprepared to perpetuate itself,” Cunningham says. “The reality is that a perpetuation plan is a process—not an event. What you’re finding now is the boomers are too late to the party. You need 10 years minimum if you don’t have the horses coming up behind you and you haven’t brought in the young talent. You’re not going to push a button and make it happen.”

That means for agency principals in their 50s and 60s who have not started thinking about perpetuation, it might be wise to sell sooner rather than later—“as long as the buyer is not also in that boomer generation,” Cunningham says, “because it takes a number of years post-acquisition to really begin to get your return on it.”

The good news? It’s still a seller’s market—for now. “Do you want to be at the front of the wave or the back end of the wave? If you’re at the front end of the wave, you have the prospect of maybe being able to negotiate a better price,” Cunningham says. “That’ll turn as more and more inventory comes on line.”

The OPTIS report covers p-c agencies; agencies selling both p-c and employee benefits; and employee benefits-only agencies. Year to date, private-equity-backed firms have been the most active buyers, accounting for 67 agency purchases. They are followed by privately held brokers with 54 deals, publicly held brokers with 27, banks with 9 and insurance companies and others with 8.

Jacquelyn Connelly is IA senior editor.